Final Word: How Much Does The Russian-Ukrainian War Affect Chinese Cars?

On February 24, Russia blitzed Ukraine, and the war broke out. Affected by this, international crude oil prices skyrocketed, breaking the 100 per barrel mark for a time, hitting a new high since 2014. While oil prices rose, the prices of some important raw materials also rose sharply. Due to the war factor, there are also problems in the supply chain of many products.

The Russian-Ukrainian war is still ongoing, and it is unknown when it will end. But the impact of the war on the global economy and the auto industry has already begun to show.

Cars are a globalized industry and inevitably will be affected by war. China is the world's largest car producer and the largest new car consumer market. The Russian-Ukrainian war will also have a certain impact on Chinese cars and the domestic car market.

The Russian and Ukrainian auto markets are not high in the global market share, but the auto parts and key products of these two countries still have a certain impact on the European auto market.

Relevant statistics show that in 2021, the sales of Russian cars will be less than 150, of which the sales of Chinese brand cars in Russia will reach 115,700, accounting for nearly 7 percent of the Russian passenger car market share. Great Wall Motor, Chery Automobile and Geely Automobile all entered the Russian market. The Russian-Ukrainian war will have a certain impact on the performance of Chinese brand cars in the Russian market.

Russia is the world's second largest oil exporter, and the Russian-Ukrainian war has caused global oil prices to skyrocket. It remains to be seen how long this trend will continue.

China is the world's largest oil importer, reaching 513 million tons in 2021, with a foreign dependence of 72 percent . According to the current formation mechanism of refined oil prices, when international crude oil prices rise or fall, domestic refined oil prices are adjusted accordingly. International oil prices have skyrocketed, and domestic oil prices will also rise sharply. Some analysts believe that domestic refined oil prices will remain high for a period of time in the future.

Oil prices account for the highest proportion of the cost of using fuel vehicles, and the sharp rise in domestic oil prices will inevitably affect the sales of fuel vehicles. But at the same time, it will bring positive factors for new energy vehicles. In 2021, China's new energy vehicles will experience explosive growth, with sales exceeding 3.5 million for the first time. Some analysts believe that China's new energy vehicle sales will reach 5 million in 2022. With the impact of the Russian-Ukrainian war on soaring oil prices, it is expected that China's new energy vehicle production and sales will further increase this year.

It is reported that with the escalation of the Russian-Ukrainian war, the international supply of neon gas, palladium and other raw materials required for chip production has been disrupted, leading to further aggravation of the global chip shortage. In the chip production process, some inert gases are indispensable, including neon gas. Russia and Ukraine are both producers of neon gas. Ukraine supplies nearly 70 percent of the world's high-purity neon gas.

Affected by the shortage of chips, China's auto production will decrease by about 2 million in 2021. It was previously believed that the supply of chips could return to normal in the second half of this year, but due to the impact of the Russian-Ukrainian war, the shortage of chips may intensify, and the impact on the domestic auto industry cannot be ignored.

After the outbreak of the Russian-Ukrainian war, many Western countries took various sanctions against Russia, which also had a certain impact on the global auto supply chain and auto logistics.